Mereo BioPharma Group reported second-quarter 2026 results showing a narrower net loss and extended cash runway, while outlining progress across its rare-disease pipeline. Cash and cash equivalents stood at $30.1 million at June 30, 2026, and the company said that balance is now expected to fund operations into late-2027, excluding any potential payments from business development activity. Net loss for the quarter was $7.0 million, compared with $14.6 million a year earlier, as research and development spending fell to $1.8 million from $5.4 million and general and administrative costs edged down to $5.2 million from $5.5 million. The company said it entered an option and license agreement with Sentynl Therapeutics for alvelestat, its investigational oral therapy for Alpha-1 Antitrypsin Deficiency-Associated Lung Disease (AATD-LD). The agreement gives Sentynl rights to acquire a license for U.S. commercial rights and global manufacturing rights, while Mereo retains rest-of-world commercial rights and will lead the global Phase 3 study and regulatory interactions until study completion. Mereo said it would receive a non-refundable option fee and, if Sentynl exercises the option, would be eligible for $40 million in upfront and R&D payments, up to $435 million in regulatory and commercial milestones, and double-digit tiered royalties on U.S. net sales. The Phase 3 trial could begin in early 2027. For setrusumab in osteogenesis imperfecta (OI), Mereo said it and Ultragenyx are in discussions with the FDA (U.S. Food and Drug Administration) and the MHRA (U.K. medicines regulator) on a potential regulatory path in pediatric patients. The two Phase 3 studies, Orbit and Cosmic, missed their primary endpoints on annualized clinical fracture rate, but both were statistically significant on bone mineral density and showed reductions in vertebral fractures plus improvements in patient-reported outcomes, with those improvements reaching statistical significance in Orbit. Mereo said the FDA was open to considering alternative approaches to fracture analysis, with further talks needed to define what additional clinical data would be required for a potential BLA (biologics license application), and said an update is expected by the end of 2026.